As soon as the EB-5 investor obtains their conditional resident visa in the US, he/she is subjected to federal income taxes. This includes income received both inside and outside of the US. However, if the US has an income tax treaty with the investor’s country of origin then he/she can receive a tax credit on the income which was already taxed in his/her country.
Once the EB-5 application request is approved by the government, the investor has 180 days to enter the US and solidify his/her residency. This 180 day period is included in the conditional residency period and, therefore, income made in those 180 days is taxable. This is why pre-immigration tax planning is of the utmost importance when considering an EB-5 visa.
It is important to keep in mind that the EB-5 investor is subjected not only to income taxes but also to other types of taxation, including inheritance and donation taxes, as well as state taxes, which differ between different states in the US. To avoid problems after receiving the Green Card, an investor should engage a tax lawyer and a certified accountant before immigrating to evaluate his/her individual situation and receive proper tax planning advice.
Taking into consideration all the specifics of the EB-5 program and its legal and tax consequences for the investor, it is recommended that the EB-5 investor seek the help of Regional Centers accredited by the American government. LCR has partners which are specialized in these EB-5 matters and can assist the investor in each stage of the process, guaranteeing hassle-free.
Contact LCR to learn more about the EB-5 visa and it tax processes.